How You Can Get A Car Loan in Brisbane?

You are in the market to buy a new car but don’t have much savings, what would you do? Just get a loan, as simple as that! However, if you have never applied for a car loan before then it is important to understand the basics, including what car loans are and how they work.

What is a car loan?

It is a type of personal loan which is taken for the purpose of buying a new or used vehicle such as a passenger car, van, truck, etc. thus it is also known as vehicle loan.

This loan can be either be secured or unsecured. A secured loan is the one where you offer ‘collateral’ to provide more security to the loan provider in case you fail to repay the money you have borrowed within the agreed timeframe. If your collateral does not cover the full amount you owe, you will have to pay what is left directly to the lender.

On the other hand, unsecured loans do not require any sort of collateral. here the lender relies on your credit score for the approval. However, this type of loans has higher interest rates than secured ones.

How does it work?

When you get approved for a car loan, the amount of money you borrowed has to be paid back within a certain period of time which is called a term. The length of the term can vary from around 12 months to 10 years depending on the lender you choose and the agreement you made with them. Lenders will also charge you interest on the balance at either a fixed or variable rate along with fees and charges, in addition to requiring you to pay back the amount you borrow. 

There is a fixed rate car loan as well where the interest rate is locked in for the entire loan. Then there is a variable rate loan, where the lender can change the interest rate during the whole term. 

You might be thinking that variable car loan in Brisbane is the one that you should opt for because you can pay fewer interest rates. But you also have the risk of increasing interest rates during the term. That is why you should consider the pros and cons before making any decisions.  

You may also get reduced monthly repayments by some car loan lenders if you agree to pay a one-off lump sum or balloon payments at the end of the loan term. Check whether the total repayments on the loan will be higher with the balloon payment than without making your decision. However, this same goes with every other loan out there. 

Although, if you are even looking to open a small food stall and wanting to get equipment finance in Brisbane along with car loan, contact Brisbane Home Loan today!